L&T Finance grows profit 27%, but margin slips for a second quarter
Costs grew faster than revenue and the tax rate rose YoY, while other income contributed only 0.01% of pre-tax profit.
Filed 24 Apr 2026, 18:49 IST · after market close · L&T Finance Ltd (LTF)
Key takeaways
- Consolidated revenue rose +18.60% YoY to Rs 4,771.03 cr, but expenses grew faster at +19.54%.
- Operating margin narrowed 0.31 percentage points YoY to 60.39%, extending its decline for a second consecutive quarter.
- Consolidated net profit increased +27.26% YoY to Rs 809.16 cr despite a 3.59 percentage-point rise in the tax rate.
Price around the results
Revenue growth outpaced the previous quarter
Consolidated revenue rose +18.60% YoY and +4.21% QoQ, taking operating profit up +17.99% YoY and +3.71% QoQ. The sequential improvement was narrower than the year-on-year gain, but the business still delivered higher operating profit despite a margin decline.
Faster cost growth trimmed the operating margin
Expenses grew +19.54% YoY against revenue growth of +18.60%, reducing operating margin by 0.31 percentage points; sequentially, expenses also grew faster than revenue and margin fell 0.29 percentage points. Interest expense rose +9.20% YoY and depreciation increased +47.27%, adding to the pressure below operating profit. Other income was only 0.01% of pre-tax profit, so reported earnings were not materially supported by non-operating income.
Tax rate diluted the conversion from pre-tax profit to net profit
Pre-tax profit rose +33.32% YoY, faster than net profit growth of +27.26%, as the tax rate increased 3.59 percentage points to 24.65%. QoQ, the tax rate fell 0.97 percentage points, helping net profit rise +9.64% even as operating margin narrowed.
Margin remains above the reported peer median
Operating margin has declined from 61.67% in Q2FY26 to 60.68% in Q3FY26 and 60.39% in Q4FY26, making this the second consecutive quarterly fall. It remained 0.98 percentage points above the 59.41% median for 52 Financial Services peers that had reported the quarter.
Early stock reaction was milder than its usual results move
The stock fell 0.78% on the first reaction day and 1.47% by the next session, while the five-session move was +0.14%; each was smaller than the 3.05% median absolute move across eight recent results reactions. Results were filed after market close on 24 Apr 2026.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,771 cr | ₹4,578 cr | +4.21% | +18.60% |
| Other income | ₹0 cr | ₹-25 cr | — | -98.37% |
| Expenses | ₹1,890 cr | ₹1,800 cr | +4.98% | +19.54% |
| Operating profit | ₹2,881 cr | ₹2,778 cr | +3.71% | +17.99% |
| Operating margin (%) | 60.39% | 60.68% | — | — |
| Interest | ₹1,747 cr | ₹1,703 cr | +2.58% | +9.20% |
| Depreciation | ₹60 cr | ₹58 cr | +4.59% | +47.27% |
| Profit before tax | ₹1,074 cr | ₹992 cr | +8.24% | +33.32% |
| Tax | ₹265 cr | ₹254 cr | +4.16% | +56.03% |
| Net profit | ₹809 cr | ₹738 cr | +9.64% | +27.26% |
| EPS (₹) | ₹3.22 | ₹2.95 | +9.15% | +26.27% |
Operating margin of 60.39% compares with a Financial Services sector median of 59.41% across 52 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.78% | -1.59% |
| Next session | -1.47% | — |
| 5 sessions | +0.14% | -0.43% |
| 15 sessions | -4.17% | — |
| 30 sessions | -10.24% | — |
Volume on the results session was 2.73× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Quarterly WACB reached a lowest-ever 7.17%, down 8 basis points quarter on quarter.
- Rural Group Loans and MFI activated 28,335 new villages in Q4 FY26.
New initiatives
- AI platforms are enabling the creation of use cases at an industrial scale.
- The company is launching contiguous product offerings.
Competition
- Rural Group Loans and Micro Finance is described as being among the leading financiers.
- Farm Equipment Finance is described as being among the leading financiers.
What to watch
- Whether operating margin holds above 60.39% after its second consecutive quarterly decline.
- Whether expense growth moves below the +18.60% YoY revenue growth rate.
- Whether the tax rate moderates from 24.65% and quarterly WACB remains near 7.17%.